A logo of Barclays bank is seen outside a branch in Altrincham, northern England April 26, 2012.
REUTERS/Phil Noble/Files

CHENNAI, India Tax authorities are investigating a possible financial scam after seizing $5 billion worth of bills of exchange issued by Barclays (BARC.L) from the home of a trader, an official at the local tax department said on Thursday.

The authorities seized five bills of exchange each valued at $1 billion from the home of T. M. Ramalingam during a December 31 raid, the tax official said. The bills were not the reason behind the raid, he said.

Ramalingam had applied for a licence to set up an oil refinery in Tamil Nadu with the money, the tax official said.

The bills were issued on February 25, 2011 and were due to mature in February 2015, according to a copy of one of the bills shown to Reuters by the tax official.

"We are in the process of verifying them as there is a possibility of a scam since the value is so high," said the tax official, who declined to be named as he was not authorised to talk to the media.

Chennai-based R. C. Mishra, director general of Income Tax Investigation declined to confirm or deny the raid or the investigation.

The tax authorities have asked Barclays about the impounded bills, the tax official said. A bill of exchange is similar to a banking draft between individuals or institutions.

Tax officials have confiscated Ramalingam's passport and called him for questioning on Friday, the tax official said.

Neither Ramalingam nor officials at Barclays were immediately available to comment.

MUMBAI State Bank of India has agreed to sell a 3.9 percent stake in its life insurance arm to affiliates of KKR and Temasek for 17.94 billion rupees ($266 million), the nation's biggest lender said on Friday.